Gold on track for monthly decline as investors brace for US inflation data

[BENGALURU] Gold prices steadied on Wednesday (Sep 30) but were headed for a monthly loss as expectations of higher interest rates weighed on sentiment, while investors awaited US inflation data for clues on the US Federal Reserve’s next policy move.

Spot gold was little changed at US$4,180.30 per ounce, as at 4.35 am GMT, but has lost 6 per cent so far in September. US gold futures gained 0.8 per cent to US$4,212.70.

The US dollar was headed for a monthly gain, making greenback-denominated metals more expensive for holders of other currencies.

The US Personal Consumption Expenditures (PCE) Price Index is due at 12.30 pm GMT.

“The PCE data release will be an important test for gold as it could influence expectations for US monetary policy, and the direction of Treasury yields and the US dollar,” said Tony Sage, chief executive officer of Critical Metals.

“A softer reading would likely support gold and open the way for a return to the US$4,200 to 4,300 range, while a hotter number could push yields and the US dollar higher, putting renewed pressure on gold and testing the US$4,100 level.”

Higher interest rates typically reduce gold’s appeal because the metal does not offer a yield.

According to the CME FedWatch Tool, traders see a 47 per cent chance of a Fed rate increase in October and a 92 per cent chance of a hike in December.

The US central bank raised interest rates by 25 basis points in September.

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Meanwhile, Federal Reserve Bank of New York president John Williams said that Fed policymakers probably only need to deliver one more hike in 2026 to get inflation back on track to the central bank’s 2 per cent goal.

On the geopolitical front, Qatar said it hopes shuttle diplomacy between Teheran and Washington would yield a breakthrough, even after US President Donald Trump denied reports that he would ease sanctions and release frozen Iranian funds in return for nuclear concessions.

Spot silver fell 0.6 per cent to US$61.07, platinum fell 0.2 per cent to US$1,703.19 and palladium lost 0.2 per cent to US$1,220.61.

All three metals were poised for monthly declines. REUTERS